Company Registration No. 07934819 (England and Wales)
KELVIN CONSTRUCTION COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
KELVIN CONSTRUCTION COMPANY LIMITED
COMPANY INFORMATION
Directors
S Innis
Mr S Van Der Vord
Mr A Dedat
(Appointed 31 March 2022)
Mr R Ziyat
(Resigned 31 March 2022)
Secretary
Ms R Butcher
(Appointed 25 November 2021)
Company number
07934819
Registered office
12 Barshaw Business Park
Leycroft Road
Leicester
United Kingdom
LE4 1ET
Auditor
Azets Audit Services
2 Regan Way
Chetwynd Business Park
Chilwell
Nottingham
United Kingdom
NG9 6RZ
KELVIN CONSTRUCTION COMPANY LIMITED
CONTENTS
Page
Directors' report
1 - 2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Income statement
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 24
KELVIN CONSTRUCTION COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company is that of structural engineers.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
No preference dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
S Innis
Mr. S Van Der Vord
Mr A Dedat
(Appointed 31 March 2022)
Mr. R Ziyat
(Resigned 31 March 2022)
Future developments and going concern
Kelvin Construction Company Limited will continue in its initiatives described above in order to ensure a sustainable and profitable future for both the company and its clients.
The financial statements have been prepared on a going concern basis, which assumes that the company will
continue in operational existence for
the forseeable future.
In assessing the appropriateness of the going concern assumption, the directors have reviewed detailed profit
and cashflow forecasts incorporating secured orders and have considered reasonably foreseeable potential
scenarios and uncertainties in relation to income and expenditure for a period of at least 12 months from the
approval of these financial statements
,
and have concluded that sufficient headroom is present to meet liabilities
as they fall due.
For the reasons set out above, the directors have prepared the financial
statements on a going concern basis
and have concluded that no material uncertainties exist related to going concern.
Auditor
Azets were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
KELVIN CONSTRUCTION COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
On behalf of the board
Mr A Dedat
Director
6 October 2022
KELVIN CONSTRUCTION COMPANY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent; and
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
KELVIN CONSTRUCTION COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KELVIN CONSTRUCTION COMPANY LIMITED
- 4 -
Opinion
We have audited the financial statements of Kelvin Construction Company Limited
(the 'company')
for the year ended 31 December 2021 which comprise the income statement, the statement of financial position, the statement of changes in equity and
notes to the financial statements, including significant accounting policies
. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the directors' report has been prepared in accordance with applicable legal requirements.
KELVIN CONSTRUCTION COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KELVIN CONSTRUCTION COMPANY LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the directors'
r
eport
. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
directors are
responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have
no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
A further description of our responsibilities is available on the
Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities.
This description forms part of our
auditor's
report.
KELVIN CONSTRUCTION COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KELVIN CONSTRUCTION COMPANY LIMITED
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
-
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
-
Reviewing minutes of meetings of those charged with governance;
-
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
-
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
-
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Mr Mitesh Thakrar (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
6 October 2022
Chartered Accountants
Statutory Auditor
2 Regan Way
Chetwynd Business Park
Chilwell
Nottingham
United Kingdom
NG9 6RZ
KELVIN CONSTRUCTION COMPANY LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 7 -
2021
2020
Notes
£
£
Revenue
3
5,635,028
5,561,814
Cost of sales
(4,139,529)
(4,345,554)
Gross profit
1,495,499
1,216,260
Administrative expenses
(1,171,140)
(477,127)
Operating profit
4
324,359
739,133
Investment income
8
4
9
Finance costs
9
(1,497)
(102)
Profit before taxation
322,866
739,040
Tax on profit
10
(35,791)
(162,600)
Profit and total comprehensive income for the financial year
287,075
576,440
The notes on pages 12 to 25 form part of the financial statements.
KELVIN CONSTRUCTION COMPANY LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2021
31 December 2021
- 8 -
2021
2020
Notes
£
£
£
£
Non-current assets
Intangible assets - goodwill
11
374,580
217,250
Property, plant and equipment
12
15,982
3,848
Right of Use assets
13
141,943
3,130
532,505
224,228
Current assets
Trade and other receivables
15
3,305,860
2,970,205
Cash and cash equivalents
1,111,406
86,019
4,417,266
3,056,224
Current liabilities
16
(2,785,791)
(1,468,546)
Net current assets
1,631,475
1,587,678
Total assets less current liabilities
2,163,980
1,811,906
Non-current liabilities
16
(64,999)
Net assets
2,098,981
1,811,906
Equity
Called up share capital
21
1
1
Retained earnings
2,098,980
1,811,905
Total equity
2,098,981
1,811,906
The financial statements were approved by the board of directors and authorised for issue on 6 October 2022 and are signed on its behalf by:
Mr A Dedat
Director
Company Registration No. 07934819
The notes on pages 12 to 25 form part of the financial statements.
KELVIN CONSTRUCTION COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 January 2020
1
1,235,465
1,235,466
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
576,440
576,440
Balance at 31 December 2020
1
1,811,905
1,811,906
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
287,075
287,075
Balance at 31 December 2021
1
2,098,980
2,098,981
The notes on pages 12 to 25 form part of the financial statements.
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 10 -
1
Accounting policies
Company information
Kelvin Construction Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is 12 Barshaw Business Park, Leycroft Road, Leicester, United Kingdom, LE4 1ET.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
The financial statements are prepared in sterling, which is the functional currency of the company.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
In these financial statements, the company has applied the following exemptions available under FRS 101:
- The requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of:
(i) Paragraph 79(a)(iv) of IAS 1;
(ii) Paragraph 73(e) of IAS 16 Property, Plant and Equipment; and
(iii) Paragraph 118(e) of IAS 38 Intangible Assets;
- The requirements of paragraphs 10(d), 10(f), and 134-136 of IAS 1 Presentation of Financial Statements;
- The requirements of IAS 7 Statement of Cash Flows;
- The requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
- The requirements of paragraphs 45(b) and 46-52 of IFRS 'Share based payments';
- The requirements of paragraph 17 of IAS 24 Related Party Disclosures;
- The requirements in IAS 24 Related Party Disclosures to disclose transactions with other wholly owned subsidiaries of the Vinci SA group; and
- Certain disclosure requirements of IFRS 15.
As the consolidated financial statements of Vinci SA include the equivalent disclosures, the company has also taken the exemptions under FRS 101 available in respect of the following disclosures:
- Certain disclosures required by IFRS 13 Fair Value Measurement by IFRS 7 Financial Instrument Disclosures and IAS 36 Impairment of Assets.
The company's ultimate parent undertaking, Vinci SA, includes the company in its consolidated financial statements. The consolidated financial statements of Vinci SA are prepared in accordance with International Financial Reporting Standards and are available to the public and may be obtained from 1 Cours Ferdinand de Lesseps, 92851, Rueil Malmaison Cedex, France.
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 11 -
1.2
Going concern
The financial statements have been prepared on a going concern basis, which assumes that the company will continue in operational existence for the forseeable future.
true
In assessing the appropriateness of the going concern assumption, the directors have reviewed detailed profit and cashflow forecasts incorporating secured orders and have considered reasonably foreseeable potential scenarios and uncertainties in relation to income and expenditure for a period of at least 12 months from the approval of these financial statements, and have concluded that sufficient headroom is present to meet liabilities as they fall due.
For the reasons set out above, the directors have prepared the financial statements on a going concern basis and have concluded that no material uncertainties exist related to going concern.
1.3
Revenue
Revenue relating to construction and service contracts is recognised in accordance with IFRS 15. In view of the company's main activities, the majority of construction and service contracts involve only one performance obligation which is fulfilled as contract execution progresses. Revenue is recognised over time and using a cost input basis which reflect the nature of the company's contract performance. To measure the progress towards completion of construction and service contracts, the company uses the cost-to-cost method. Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management.
Contract amendments (relating to the price and/or scope of the contract) are recognised when approved by the client. Where amendments relate to the new goods or services regarded as distinct under IFRS 15, and where the contract price increases by an amount reflecting stand-alone selling prices of the additional goods or services, those amendments are recognised as a distinct contract. The cost of winning the contract that would not have been incurred if the company had not won the contract is recognised as an asset where it is recoverable and amortised over the estimated contract term. At the company level, the cost of winning contracts, capitalised and amortised over a period of more than one year, is not material. The company's invoicing to customers is designed to match the profile of its costs and cashflows, where the invoicing profile does not match the pattern of revenue recognition this results in contract assets and liabilities.
1.4
Goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less impairment losses.
Company law requires goodwill to be written off over a finite period. Non-amortisation of goodwill, in accordance with International Financial Reporting Standards, is a departure from the requirements of company law for the overriding purpose of giving a true and fair view. If this departure from company law had not been made, the profit for the financial year would have been reduced by amortisation of goodwill. However, the amount of amortisation cannot reasonably be quantified other than by reference to an arbitrary assumed period for amortisation.
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 12 -
1.5
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant & machinery
Enter depreciation rate via StatDB - cd77
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the
income statement
.
1.6
Impairment of tangible and intangible assets
At each reporting end date, the
company
reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial assets
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 13 -
Financial assets at fair value through profit or loss
When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
Financial assets at fair value through other comprehensive income
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
The company has made an irrevocable election to recognize changes in fair value of investments in equity instruments through other comprehensive income, not through profit or loss. A gain or loss from fair value changes will be shown in other comprehensive income and will not be reclassified subsequently to profit or loss. Equity instruments measured at fair value through other comprehensive income are recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognized through other comprehensive income are directly transferred to retained earnings when the equity instrument is derecognized or its fair value substantially decreased. Dividends are recognized as finance income in profit or loss.
Impairment of financial assets
Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.
The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
1.9
Financial liabilities
The company recogni
s
es financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either
'
financial liabilities at fair value through profit or loss
'
or
'
other financial liabilities
'
.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as
measured at
fair value through profit or loss when the financial liability is held for trading. A financial liability is classified as held for trading if:
-
it has been incurred principally for the purpose of
repurchasing it in the near term, or
-
on initial recognition it is part of a portfolio of identified financial instruments that the
manages together and has a recent actual pattern of short-term profit taking, or
-
it is a derivative that is not
designated and effective hedging instrument.
Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or
loss
.
Other financial liabilities
Other financial liabilities, including borrowings
, t
rade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs
directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method
.
For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the
company’s
obligations are discharged, cancelled, or they expire.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
income statement
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
income statement
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Provisions
A provision is recognised in the balance sheet when the company has a present legal or constructive obligation as a result of a past event, that can be reliably measured, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of
inventories
or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
At inception, the company assesses whether a contract is
,
or contains
,
a lease
within the scope of IFRS 16. A contract is
,
or contains
,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within
property, plant and equipment,
apart from those that meet the definition of investment property
.
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in
:
future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
1.16
Foreign exchange
Transactions in foreign currencies are translated to the company's functional currency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the exchange rate ruling at that date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined. Foreign exchange differences arising on translation are recognised in the profit and loss account.
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 17 -
2
Critical accounting estimates and judgements
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Key sources of estimation uncertainty
Percentage completion estimate
The determination of revenue recognition and associated amounts recoverable on contracts or payments on account, are subject to estimation uncertainty in respect of measurement of each contract's % stage of completion which is measured on a cost to cost basis as disclosed in note 1.3.
Bad debt provision
Provisions required in respect of irrecoverable debts requires a level of estimation uncertainty in
regards amounts contractually due from customers which are no longer expected to be
recovered with reference to the financial stability of each customer and the expected level of
post year end payments to be made.
3
Revenue
2021
2020
£
£
Revenue analysed by class of business
Structural engineers
5,635,028
5,561,814
2021
2020
£
£
Revenue analysed by geographical market
United Kingdom
5,351,663
5,434,986
Europe
283,365
84,315
Rest of the World
-
42,513
5,635,028
5,561,814
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
4
Operating profit
2021
2020
£
£
Operating profit for the year is stated after charging/(crediting):
Fees payable to the company's auditor for the audit of the company's financial statements
15,000
8,000
Depreciation of property, plant and equipment
6,214
11,696
Amortisation of right of use asset
58,418
1,941
Amortisation of intangible assets
60,170
-
Foreign exchange (profit)/loss
(311)
25,306
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
15,000
8,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Production
40
14
Administration and support
5
4
Total
45
18
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
1,827,939
626,062
Social security costs
195,843
40,826
Pension costs
81,405
26,792
2,105,187
693,680
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
Certain directors are employed by other companies within the Vinci SA group and are paid directly by those companies. The emoluments they receive in respect of their role as directors of this company are not disclosed in these financial statements as they have not rendered services to the company.
8
Investment income
2021
2020
£
£
Interest income
Interest on bank deposits
4
9
9
Finance costs
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Foreign exchange (gains) / losses
(5)
(311)
Interest on other financial liabilities:
Interest on lease liabilities
1,502
413
Total interest expense
1,497
102
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
35,791
162,600
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
10
Taxation
(Continued)
- 20 -
The charge for the year can be reconciled to the profit per the income statement as follows:
2021
2020
£
£
Profit before taxation
322,866
739,040
Expected tax charge based on a corporation tax rate of 19.00% (2020: 19.00%)
61,345
140,418
Effect of expenses not deductible in determining taxable profit
1,523
2,809
Other
(27,077)
19,373
Taxation charge for the year
35,791
162,600
11
Intangible fixed assets
Goodwill
£
Cost
At 31 December 2020
302,500
Additions - purchased
157,330
At 31 December 2021
459,830
Amortisation and impairment
At 31 December 2020
85,250
At 31 December 2021
85,250
Carrying amount
At 31 December 2021
374,580
At 31 December 2020
217,250
12
Property, plant and equipment
Plant & machinery
£
Cost
At 31 December 2020
73,589
Additions
18,348
At 31 December 2021
91,937
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
12
Property, plant and equipment
Plant & machinery
£
(Continued)
- 21 -
Accumulated depreciation
At 31 December 2020
69,741
Charge for the year
6,214
At 31 December 2021
75,955
Carrying amount
At 31 December 2021
15,982
At 31 December 2020
3,848
13
Right of Use assets
2021
£
Cost
At January 2021
8,874
Additions through acquisition
206,105
Disposals
(8,874)
At 31 December 2021
206,105
Accumulated depreciation
At 1 January 2021
5,744
Charge for the year
67,292
On disposals
(8,874)
At 31 December 2021
64,162
Carrying value
At 31 December 2021
141,943
At 31 December 2020
3,130
14
Contracts with customers
2021
2020
£
£
Contracts in progress
Contract assets
748,706
793,134
Contract liabilities
(288,117)
(350,203)
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
15
Trade and other receivables
2021
2020
£
£
Trade receivables
1,342,904
286,488
Provision for bad and doubtful debts
(215,937)
-
1,126,967
286,488
Contract assets (note 14)
748,706
793,134
Amounts owed by fellow group undertakings
1,259,262
1,690,134
Amounts owed by related parties
-
7,884
Other receivables
6,024
133,307
Prepayments and accrued income
161,627
55,957
3,302,586
2,966,904
Deferred tax asset
3,274
3,301
3,305,860
2,970,205
16
Liabilities
Current
Non-current
2021
2020
2021
2020
Notes
£
£
£
£
Borrowings
655,713
40,512
Trade and other payables
17
1,707,385
1,037,368
Corporation tax
45,189
116,910
-
-
Other taxation and social security
308,634
273,756
-
-
Lease liabilities
18
68,870
-
64,999
-
2,785,791
1,468,546
64,999
-
17
Trade and other payables
2021
2020
£
£
Trade payables
582,525
397,443
Contract liabilities (note 14)
288,117
350,203
Amounts owed to fellow group undertakings
678,501
160,065
Accruals and deferred income
114,823
107,351
Other payables
43,419
22,306
1,707,385
1,037,368
18
Lease liabilities
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
18
Lease liabilities
(Continued)
- 23 -
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2021
2020
£
£
Current liabilities
68,870
-
Non-current liabilities
64,999
-
133,869
-
2021
2020
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
1,502
413
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
ACAs
£
Asset at 1 January 2020
(3,301)
Asset at 1 January 2021
(3,301)
Deferred tax movements in current year
Charge/(credit) to profit or loss
27
Asset at 31 December 2021
(3,274)
20
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
81,405
26,792
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
KELVIN CONSTRUCTION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 24 -
21
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
1
1
1
1
22
Controlling party
The company is wholly owned subsidiary of Vinci Energies UK Holdings and Vinci Energies SA is the ultimate parent company, incorporated in France.
The most senior parent entity producing publicly available financial statements is Vinci SA. These financial statements are available upon request from 1 Cours Ferdinand de Lesseps, 92851 Rueil Malmaison Cedex, France.
2021-12-31
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